The vast majority of NVDA's value is based on the assumption they are the only game in town that can do AI. I'm still waiting for a competing tech to disrupt them further:
* Intel, AMD, etc. could start making competitive GPUs that push the price down
* A new ASIC chip specifically designed for LLMs
* A new training or LLM runtime algorithm that uses the CPU
* Quantum chip that can train or run a LLM
If Nvidia lost its AI dominance, where would its stock be?
The thing with Nvidia is that it doesn't have a large "sticky" customer base that is guaranteed to spend money year after year on new products. If you look at other large tech companies with similar valuations (Apple, Microsoft, Amazon, Google, Meta), none of them are in danger of their core business disappearing overnight. In Nvidia's case, if large tech companies decide they don't need to continue loading up on AI chips and building larger data centers then they are back to where they were in ~2020 ($100-150B market cap from selling GPUs to gamers and professionals working on graphics-intensive apps).
* Intel, AMD, etc. could start making competitive GPUs that push the price down
* A new ASIC chip specifically designed for LLMs
* A new training or LLM runtime algorithm that uses the CPU
* Quantum chip that can train or run a LLM
If Nvidia lost its AI dominance, where would its stock be?